Commercial Property Insurance

Ontario Commercial Property Insurance

Commercial property insurance is a necessary coverage that helps protect your business. It protects the physical assets of your business, such as buildings, contents, equipment, inventory, and property in transit, against loss or damage from a range of causes.

You have multiple options in the scope of your coverage when you work with Morison Insurance. Our business insurance professionals will help you to identify and manage the many risks to which your business may be exposed. Let us help you get the commercial property insurance you need at the best price.

What is Commercial Property Insurance?

Ontario commercial property insurance is essential to a comprehensive business insurance policy. Whether you and your employees perform your jobs in one or multiple commercial buildings or you typically travel to clients’ properties to deliver goods and services, commercial property insurance is necessary to protect you from paying out of pocket for repair, replacement and restoration costs should your property be damaged or destroyed by an insured peril. A commercial property insurance policy is essential protection against severe financial losses in the event that your commercial property or the belongings contained within are rendered unusable.

Is Ontario Commercial Property Insurance Legally Required?

Like most types of business insurance, except commercial auto insurance, the government does not legally require commercial property insurance. However, it’s commonly listed as a requirement on a commercial lease agreement, lease contract, or even on a real estate purchase contract. With Ontario commercial property insurance, you’ll likely be able to lease or buy a commercial property that meets your business needs.

Even if you’re not required by anyone to have commercial property insurance, as a business owner, you can’t afford to go without its financial protection. No matter how careful you are, there’s no way to guard your property and its contents against everything that could happen. You can’t stop a fire, extreme weather patterns and other perils that could cause severe destruction and bring your business grinding to a halt. Most business owners can’t pay the costs of recovering from a disaster like that without experiencing devastating financial hardship that could end their business prematurely. Why put yourself through the stress and ruin of a significant financial setback when you can have the Ontario commercial property insurance protection you need for a reasonable cost?

What is Covered By Ontario Commercial Property Insurance?

When it comes to commercial property insurance, Ontario residents should understand that the types and amounts of coverage can vary significantly based on the policyholder’s insurance needs. There’s no one-size-fits-all solution for commercial property insurance coverage, so knowing how your particular policy is written is essential. Here are some key considerations for Ontario commercial property insurance.

All-Risk Vs. Named Perils

Commercial property insurance policies typically come in one of two coverage types: all-risk or named perils. All-risk coverage means that all perils are covered except those expressly excluded from the policy. Named perils coverage, on the other hand, represents the opposite in that all perils are excluded except for those specifically listed on the policy—in other words, the “named perils.”

All-risk commercial property insurance policies are the more commonly-chosen option because they offer a more comprehensive form of insurance coverage that most business owners need. All-risk policies typically cover perils such as fire, natural disasters, theft and vandalism. It’s worth noting that they often exclude water damage that occurs through various means, such as overland flooding or sewer backups, though this type of coverage can be added as an endorsement.

Contents Insurance

Suppose a fire sweeps through your commercial building. It doesn’t just damage the building and destroys everything inside, including office furniture, computers, specialized equipment and stock inventory. You would be faced with the burden of paying for both building restoration and replacement of everything inside the building unless you can access the insurance compensation afforded by Ontario commercial property insurance and contents coverage. 

Does Commercial Property Insurance Offer Liability Coverage?

No, it doesn’t. Commercial property insurance is a type of property coverage that provides protection against financial loss for expenses related to restoration and replacement following a destructive event. For liability coverage, you need various types of business liability insurance. Commercial general liability (CGL) is a standard part of any commercial insurance package. It provides coverage for liability costs related to third-party bodily injury or third-party property damage. Other types include cyber insurance coverage, professional liability insurance (also known as errors and omissions insurance), product liability insurance and more.

What is Not Covered by Ontario Commercial Property Insurance?

Generally speaking, commercial property insurance does not automatically cover items, merchandise or equipment not on your commercial property when it is damaged, destroyed or stolen. You can, however, purchase a tool or equipment floater to cover such perils. It also does not cover business vehicles, which require commercial auto insurance, or any perils that are either listed as exclusions on an all-risk policy or perils listed as inclusions on a broad variety named perils policy. Deliberate damage or destruction and employee theft are not covered. Also, as mentioned above, Ontario commercial property insurance policies do not include coverage for liability issues.

Which Endorsements are Recommended for Ontario Commercial Property Insurance?

Depending on your business type and how you choose to run it, you may need to consider additional coverage options for your business property policy to protect against the financial setbacks that are most likely to occur to your business. Here are a few types of insurance endorsements that are worth knowing about.

Water Damage Coverage

As mentioned above, water damage is typically not automatically included in an Ontario commercial property insurance policy—but as anyone who has ever had to deal with significant water damage restoration before will tell you, it’s well worth having insurance protection so you don’t have to pay those costs out of pocket. Various types of water damage coverage are available, so choosing the most applicable to your location makes sense. For example, suppose your commercial property is located near a river or another body of water prone to flooding or has experienced severe flooding. In that case, a flooding endorsement is a must-have for your commercial property coverage.

Business Interruption Coverage

Suppose your commercial building and its contents, including essential business equipment, are damaged or destroyed. In that case, you can rely on your Ontario commercial property insurance for financial assistance to recover—but replacement, repair and restoration work can take weeks or even months. While the restoration process is underway, you can’t run your business, which will most likely have a devastating negative impact on your bottom line. An extended disruption could ruin a business that doesn’t have business interruption insurance on its commercial property insurance policy. Business interruption insurance is critical coverage that will provide financial help so you can recoup your loss of income and manage other expenses such as employee wages so you can get your business back to normal as quickly as possible and bring in revenue with assistance from commercial property insurance. Ontario business owners should note that business interruption coverage does not typically apply to government-mandated closures for infectious disease control.

Equipment Breakdown Insurance

Rely on expensive, specialized equipment for the products you manufacture or the services you provide? It can be disastrous to have them break down because of factors such as mechanical failure or operator error. Suppose your equipment suddenly grinds to a halt when you’re gearing up for a busy day of fulfilling a large order. In that case, it can be a significant problem that could cause you to breach your contractual obligations or lose out on the income you would otherwise receive. That’s when equipment breakdown insurance is necessary. Standard Ontario commercial property insurance won’t typically cover mechanical failures. Still, when you’ve added equipment breakdown insurance to your policy, you can get the insurance compensation you need to get it repaired or replaced.

Do You Need Commercial Property Insurance if You Operate Your Business From Home?

If you run a small business out of your home and you already have homeowners insurance, you may assume you’re covered for anything that happens at your home workplace. However, it’s essential to understand that your home insurance coverage does not apply to the equipment, tools, materials, stock, or products you use or create for business purposes.

For example, say you had a small business creating artisan products in your attached garage and shipping them to customers. If a fire at your house is caused by faulty electrical wiring that destroyed your equipment and products, your homeowners insurance would cover the cost of the building restoration. Still, you would only receive compensation to repair or replace your damaged equipment, tools, materials and inventory if you also had a commercial property insurance policy. On the other hand, if the fire accidentally started when you were working in your garage with flammable materials for business purposes, you would likely not receive any insurance compensation from your homeowner’s insurance carrier.

Do You Need Commercial Property Insurance if Your Landlord Already Has Coverage?

This is a common misconception about commercial property insurance. If you rent or lease a commercial space and the landlord who owns the building has property insurance coverage, you still need your own commercial property insurance. In fact, many property owners will only lease a business space to you with proof that you have property insurance coverage. Remember that your landlord’s insurance policy benefits them because they are the policyholder. It doesn’t include any coverage for your belongings, equipment, materials, products, furniture and everything else you bring into the space to operate your business, so even if the building owner’s insurance completely covers the business building, your contents are not covered unless you have your own commercial property insurance policy.

How Much Does Ontario Commercial Property Insurance Cost?

Ontario commercial property insurance premiums vary based on the essential factors influencing most business insurance rates. That includes:

• Whether you were previously insured
• The building location
• The size of the building
• Your previous claims history
• Your work experience
• The number of people you employ
• Building details, such as whether it has sprinklers

The best way to learn more about how much you can expect to pay for commercial property insurance is to chat with an experienced Morison Insurance broker and give them some information on your business location, along with details on how you choose to operate your business. This information will allow them to find the ideal coverage combination at competitive rates and ensure you have the right Ontario commercial property insurance coverage for your unique business needs.

Where Can a Business Owner Get a Quote for Ontario Commercial Property Insurance?

Are you ready to learn more about Ontario commercial property insurance or get started on a quote? Call Morison Insurance at 1-800-463-8074 to speak directly with a knowledgeable, experienced broker and get all your questions answered quickly and easily. Because we work for our clients rather than for the insurance companies, our top priority is making sure your insurance needs are met with adequate commercial property insurance coverage that gives you the financial security you need.